With the exception of a few states, such as Virginia and New Hampshire, auto insurance coverage is mandatory across the U.S. For this reason, a majority of American car owners carry auto insurance, which costs about $1,400 annually on average, according to a recent study by Business Insider. The actual cost of your auto insurance coverage will depend on various factors, including, among others, your driving history, gender, age, type of car, and the amount of coverage you need. For example, teen drivers pay higher premiums since insurance carriers generally perceive them to be high-risk motorists.
Here are five things you can do to lower your auto insurance premium.
1. Drive Safely
Insurance companies usually charge higher premiums for higher risks to cover the possibly large or frequent claims. The National Highway Traffic Safety Administration (NHTSA) characterizes risky driving as driving under the influence, distracted driving, speeding, drug-impaired driving, drowsy driving, and not wearing seat belts. Such traffic violations can easily cause road accidents. Some of the things that may cause your auto insurer to consider you a high-risk motorist include, among others:
• Accidents on your driving record
• Many previous traffic tickets
• Convicted for driving under the influence (DUI)
To ensure your auto premiums remain relatively low, maintain a clean driving record.
2. Follow Your Car’s Maintenance Schedule
Before insuring a vehicle, insurance companies typically perform a risk assessment. In particular, your auto insurer will inspect your car to ensure it is in good condition. If your car is in perfect condition, it means that it is unlikely to develop any problems unexpectedly, and therefore, you can expect to pay lower auto insurance premiums. On the other hand, an unmaintained car is more vulnerable to accidents, and hence you will have to pay more to cover the risk.
3. Increase Your Deductible
When you file an auto insurance claim, your auto insurance carrier will require you to pay a portion of the cost of repairing or replacing your car upfront. This upfront payment is called a deductible, and it determines your auto insurance premiums. A low deductible means a higher auto premium, whereas a high deductible means lower insurance premiums. To enjoy a lower car insurance premium, increase your deductible.
4. Bundle Your Insurance
Many companies across the U.S., including auto insurance companies, have loyalty programs designed to reward their loyal customers with discounts, free items, and even paid vacations. In general, such programs are highly popular with American consumers. In 2015 alone, for example, the average American consumer was a member of about 13 loyalty programs, as reported by Statista. If your auto insurance carrier has an active loyalty program, you should enroll in the same. You can also purchase different insurance products from one insurer in exchange for lower premiums. For instance, you can bundle your auto insurance coverage with your homeowners insurance coverage, which in turn will reduce your auto insurance premium.
5. Switch Cars
The type of car you own can have a huge impact on auto insurance premiums. This is because some cars are more prone to theft or accidents than others. For instance, in 2015, the 1996 Honda Accord was the most stolen car model, as reported by the National Insurance Crime Bureau (NICB). Hence you should choose to buy a less vulnerable car to lower your auto insurance premium.
These are some of the things you can do to lower your car insurance premium. If you have additional questions about vehicle insurance, contact the experts at Udell Family Insurance today. We are willing to assist you with all your coverage needs.